The Federal Government’s Fair Work Act 2009 was passed on 20 March 2009 and this will abolish Work Choices. A significant introduction of the Fair Work Act is the National Employment Standards (NES) which is a safety net of minimum conditions applying to all employees in the Federal system.
The maximum hours an employer can require/request an employee to work is 38 hours plus additional hours which are reasonable. What is reasonable depends on a range of factors including: occupational health and safety risk, the employee’s family responsibilities, the needs of the workplace, employee entitlements to receive overtime payments, penalty rates or other compensation, the amount of notice given, industry work patterns, the employee’s role and level of responsibility, or any other relevant matter.
An employee with at least 12 months’ service, who is a parent or has the responsibility for the care of a child under school age, may make a request for flexible working arrangements to assist him or her to care for the child. This request must be made in writing and the employer may only refuse the request on reasonable business grounds and must provide the reasons for the refusal in writing to the employee.
An employee with at least 12 months’ service is entitled to 12 months' unpaid parental leave if the leave is associated with the birth or adoption of a child, and if the employee has or will have the responsibility for the care of the child. However, the 12 months are reduced by the amount of unpaid special maternity leave the employee has taken (for example, because of pregnancy-related illness). The 12 months can be extended by up to an additional 12 months by the employee if agreed with the employer in writing. An employee on finishing unpaid parental leave is entitled to return to their pre-parental leave position. Where this is not possible, for example, where that position no longer exists – the employee should be appointed to a position for which the employee is qualified and suited nearest in status and pay to their pre-parental leave position.
For each year of service, an employee is entitled to:
- four weeks’ paid annual leave, unless the employee’s employment is defined or described in a modern award as a ‘shiftworker’, then the employee is entitled to five weeks’ paid annual leave; and
- 10 days’ paid personal/carer's leave (which accrues progressively during a year of service according to the employee’s ordinary hours of work) where the employee is unfit for work because of personal injury or illness, or to provide care or support to an immediate family member, or member of their household who has a personal injury or illness, or because of an unexpected emergency affecting the member. A further two days’ unpaid carer’s leave can be taken for each permissible occasion (but not if they could instead take paid personal/carer’s leave); and
- two days' compassionate leave if they or a member of their immediate family or household contracts or develops a personal illness or injury that poses a serious threat to his or her life, or if someone in their immediate family or household dies.
Community service leave entitles an employee to be absent from his or her employment for the time when the employee is engaged in the activity, for reasonable travelling time associated with the activity and for reasonable rest time immediately following the activity. Eligible community service activities include jury service, voluntary emergency management activities, and other activities of a community service nature.
An employee is entitled to long service leave under the relevant State/Territory Long Service Leave Act and in certain circumstances under applicable award-derived long service leave provisions.
An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday, however an employer may request an employee to work on a public holiday if reasonable to do so. However, in accordance with additional working hours, an employee may refuse the request if the request is not reasonable OR the refusal is reasonable. Importantly, if a permanent employee is absent on a public holiday falling when they would ordinarily work, the employer must still pay the employee at the base rate of pay for the employee’s ordinary hours of work on the day.
An employer must give an employee written notice of termination and cannot terminate the employee’s employment unless the minimum period of notice is given, or the employer pays the employee in lieu of notice the amount the employer would have been liable to pay had the employee worked the period of notice. The period of notice is calculated by the employee’s period of continuous service. The minimum notice period is increased if the employee is older than 45 and has completed at least two years’ continuous service.
| Not more than 1 year |
1 week |
| More than 1 year but not more than 3 years |
2 weeks |
| More than 3 years but not more than 5 years |
3 weeks |
| More than 5 years |
4 weeks |
Furthermore, if the employee’s employment is terminated because of insolvency or bankruptcy of the employer, or because of redundancy the employee is entitled to severance pay in addition to notice. This is calculated based on the period of continuous service of the employee on termination.
| At least 1 year but less than 2 years |
4 weeks |
| At least 2 year but less than 3 years |
6 weeks |
| At least 3 year but less than 4 years |
7 weeks |
| At least 4 year but less than 5 years |
8 weeks |
| At least 5 year but less than 6 years |
10 weeks |
| At least 6 year but less than 7 years |
11 weeks |
| At least 7 year but less than 8 years |
13 weeks |
| At least 8 year but less than 9 years |
14 weeks |
| At least 9 year but less than 10 years |
16 weeks |
| At least 10 years |
12 weeks |
If an employer obtains other acceptable work for the employee or cannot pay the amount, then an application can be made to Fair Work Australia to determine if the redundancy payment amount can be reduced. Similarly, if an employee in a business being transferred rejects an offer of employment with the new employer where the terms and conditions are substantially similar to, and considered on an overall basis, no less favourable than the employee’s current terms and conditions, and the new business recognises the employee’s service with the former employer in the business being transferred, the employee is not entitled to redundancy pay (although this can be challenged through Fair Work Australia).
Obligations of redundancy pay do not apply if at the time the employee is given notice of the termination or immediately before the termination the employer has fewer than 15 employees.
Finally, Fair Work Australia will publish a “Fair Work Information Statement” which must be given to each new employee before or as soon as practicable after they commence their employment.
By knowing and understanding how these changes will affect your business you can prepare yourself better for the months ahead. The Fair Work Act is legislation close to the heart of the Government and failure to comply could be damaging to your business. Further information on the NES can be found at http://www.workplace.gov.au
For further information in relation to Fair Work and the National Employment Standards please contact:
Louise Houlihan, Partner on +61 3 9608 2273 or l.houlihan@cornwalls.com.au
